Monthly Archives: October 2012

The Interwebz! Studies! Ponies!

A few final miscellania

Section 1561 discusses new standards for health information technology. The Public Health Service Act is modified to require standards to facilitate the enrollment into these various programs. They will do this through creating systems of electronic applications; utilizing current eligibility data, such as employment and tax records; reusing existing documents; providing places for enrollees to fill out these eligibility forms; and so on. It also authorizes grants for this purpose to the states.

Section 1562 authorizes a study into the incidence of both denial of coverage by and enrollment in health insurance plans.

Section 1563 says that any contract with a small business must still follow Part 19 of the Federal Acquisition Regulation and section 15 of the Small Business Act.

Section 1563 (the second apparently) lists a bunch of amendments to various other laws to make them make sense with this one.

Section 1563 (the third) says that the Senate says this Act will reduce the budget deficit between 2010 and 2019 and after, extend the solvency of Medicare, increase the Social Security Surplus, increase the savings for the Community Living Assistance Services and Support, put a chicken in every pot, make ponies come out of rainbows, and create world peace. Ok – maybe not those last three.

The rest of this week we will look at Increased Access to Medicaid – the portion of the PPACA that does include some things struck down by the Supreme Court.

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And a few addemdums, ipso facto…

The last few sections in this part are entitled “Miscellaneous Provisions”, and boy are they that.

Section 1551 says that the Public Health Service Act definitions are the default, unless otherwise stated.

Section 1552 says that there is a website somewhere that says all of this information.

Section 1553 says that no Federal entity can discriminate against an institution that refuses to provide assisted suicide. I wasn’t aware that they would, but there you go.

Section 1554 limits unknown, unstated regulations on the part of the Secretary of Health and Human Services that might limit access to medical care, timely medical care, full discussions of options of medical care, full disclosure on the part of the provider, violates informed consent, practice ethics, or availability of medical care for the full duration of the patient’s needs. It doesn’t say anything about preventing limiting the same in Congress or state Legislatures.

Section 1555 says that no person, company, individual, or health insurance issuer has to participate in a Federal health insurance program. Except, I suppose, the employees of the federal government, who will be opted in automatically, unless some later provision (or in fact this one) prevents them from doing so. I admit – I’m not entirely clear what they meant here, other than prevention of some terrible world in which we were all forced to get Medicare and have our health care paid for by the federal government. Tragedy!

Section 1556 – is entitled “Equity for Certain Eligible Survivors”. The survivors they are discussing are those of Black Lung Disease. The equity is changing two sentences in the original Act that provides benefits for these workers. I’ll include the sentences that were struck here, for posterity:

The first being:

The Secretary may rebut such presumption only by establishing that

(A) such miner does not, or did not, have pneumoconiosis, or that

(B) his respiratory or pulmonary impairment did not arise out of, or in connection with, employment in a coal mine. The provisions of this paragraph shall not apply with respect to claims filed on or after the effective date of the Black Lung Benefits Amendments of 1981.

The second being:

  • In no case shall the eligible survivors of a miner who was determined to be eligible to receive benefits under this subchapter at the time of his or her death be required to file a new claim for benefits, or refile or otherwise revalidate the claim of such miner, except with respect to a claim filed under this part on or after the effective date of the Black Lung Benefits Amendments of 1981,.

Section 1557 reminds you that several pieces of legislation, like the Civil Rights Act of 1964, title IX of the Education Amendments, the Age Discrimination Act of 1975, and the Rehabilitation Act of 1973 prevent you from discriminating against people. So quit it!

Section 1558 says that your employer can’t fire you if you take the credit you were offered, or tell the Feds that your employer violated this Act, or testified to such, or objected to their violations.

Section 1559 give the Inspector General the right of oversight for this Act.

Section 1560 is a grab bag: this Act doesn’t modify or supersede Anti-trust laws, it doesn’t limit Hawaii’s prepaid health care plan (say what?? Perhaps a later post), or student health insurance plans.

Nope, not done with the miscellanea, but I’ll give you a rest for today.

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The day after blues

After all of the excitement of yesterday, with the details of the individual mandate and all, section 1502 is a bit of a letdown. It discusses how to amend the tax code, to alter the tax forms, to make a line for reporting this health coverage status that you are supposed to know and have, or you will get the penalty mentioned in section 1501. Important, but not very interesting to us.

So, we will move on to the next large section – Part II – Employer Responsibilities

Section 1511 sets out a plan for automatically enrolling companies with a large number of employees (>200) into one of the plans they offer.

This is interesting from a scientific point of view. Research has shown that something called the “status quo bias” will lead people to be more likely to enroll in retirement plans if they are opt-out, rather than opt-in. (Eric J. Johnson, and Daniel Goldstein, “Do Defaults Save Lives?” Science, 2003)One can assume, then, that this will probably apply to health insurance as well. Which will automatically avoid any tax penalties for those people who are working for larger firms.

Section 1512 states that the employers have to tell their employees at the time of hire about the health insurance Exchanges, the tax credit premium assistance, and the impact of free choice vouchers on income.

Section 1513 is about legal responsibilities to provide coverage. If a large firm fails to offer any of its full-time employees the chance to enroll in a health insurance plan, while at the same time offering even one full-time employee a health plan, then they must pay a penalty. One assumes this is to prevent executives from being offered health plans that the employees are not. They can still offer then at higher prices, but if they get too expensive, then the employee is eligible for the tax credit. However, if employees take the tax credit, then the businesses are assessed a penalty of $250 per employee per month that this is the case. Large employers, then, cannot just pass all of their costs onto the employee. If you provide free-choice vouchers (explained MUCH later down the road, although included helpfully after section 1515 for information) then that company is NOT subject to this penalty. This is true if the employer has over 50 full-time employees.

Lots more details about how to calculate firm size, and penalty amounts, and full time employees. There is a provision to perform a study to see if this rule has any impact on worker’s wages. A report even!

Section 1514 is like 1502, but for the employers – how to report all of this on their tax forms.

Section 1515 is entitled “Offering of Exchange-Participating Qualified Health Plans Through Cafeteria Plans”. What it boils down to is that if you offer one of these plans, and people enroll in it, even though that makes them eligible for the tax credit, you won’t be charged the tax penalty.

Tomorrow we will move on the Miscellaneous provisions!


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Best laid plans

So, we have come to this at last. The new section of the PPACA we are looking into is Subtitle F – Shared Responsibility for Health Care. Part I addresses individual responsibility. Specifically, the responsibility to maintain a minimum essential coverage of insurance, section 1501.

Section 1501 starts out with a long discussion of why insurance is interstate commerce, talking about how expensive it is, and how this will insure almost all Americans. It notes that in Massachusetts, this same type of requirement actually increased the number of employers who offered employer-based coverage. It doesn’t mention who was governor when that happened – anyone remember? It talks about the economic impact of disease and shortened lifespan, the cost of providing care to those without coverage, and reminds us that the Supreme
Court already said that insurance was subject to regulation under the interstate commerce class.

All of that was, of course, intended to be part of the argument before the Supreme Court (because, again of course, this issue would appear before the Court) that this Act was constitutional because of the interstate commerce clause. Which the Supreme Court promptly said “NOPE” to when it made it there before it was even fully enacted. However, you shouldn’t fear – because Congress chose the IRS to be the people in charge of handling all of the penalties for not following the mandate, the Act, or at least most of it, was declared constitutional under the seemingly endless power of the Federal government to tax and spend. Which, if you think about it, is all they are really supposed to do.

What does the Individual
Mandate actually do? Well, it amends the Tax Code, specifically section 5000A, to say that every person, in every month starting January 1, 2014, has to maintain minimum essential coverage for their health expenditures. If they don’t, they are subject to a penalty on their tax return. I guess this means we get to learn new tax forms. Oh boy. The penalty is either calculated by a formula given in this section, or by the amount they would have had to pay for bronze level coverage (remember the colors!) in an Exchange, whichever is LOWER.

The penalty formula is per month, per person, and can be a flat dollar amount or percentage of income, whichever is GREATER. The flat dollar amount is $695, although there is a phase in period where it is $95 in 2014, and $325 in 2015. The flat amount is capped at 300% of total dollar amount, and is subject to cost-of-living increases. The percentage of income is also phased in – 1% in 2014, 2% in 2015, and 2.5% thereafter.

Let’s do an example.

Assume you are the sole income, and you make $50,000 a year, with 2 adults and 2 kids. If you didn’t have any insurance, then the most you would be required to pay, in 2016, would be $2085. If there were a plan that insured you for less, then you would be charged that amount, instead. But then, if there were a plan that would cover you for that – why didn’t you buy it?

Exemptions:

This doesn’t apply at all to people that are members of a recognized religious sect; a member of a health care sharing ministry (remember those?); the Not Lawfully Present (you know who you are); and people in jail. It also doesn’t apply if you can’t afford coverage, which is defined as being charged more than 8% of your income per month (also alterable with changing conditions) for health insurance, whether offered through an employer, or through the Exchange (after accounting for the credit); people who make so little they don’t have to file taxes at all; members of Indian tribes; any month where you weren’t covered, but the total number of months you weren’t covered was less than 3 consecutive (think changing jobs); or anyone who gets a hardship exemption through HHS.

Minimum Essential Coverage is defined as: Medicare, Medicaid, CHIP, TRICARE, the VA, Peace Corps health insurance, eligible employer-sponsored plans, individual plans, grandfathered plans, and other plans, such as the plan of being outside the US (no really – that counts!). So – that’s a lot of plans.

They can’t criminally charge you for not paying the penalty, and they can’t take your property either. I suppose they will write you sternly worded letters.

I haven’t yet noted that we are now required to purchase broccoli. I always wondered – do they mean we have to consume it too, when we are required to purchase it, or just buy it? Clarity, people, clarity.

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